Surf Air Mobility Reports Q3 Progress on Transformation Plan, Positions for Electric Aviation Future
Surf Air Mobility demonstrates operational improvements and strategic positioning toward electric aviation while navigating its financial transformation.
Surf Air Mobility Inc. (NYSE: SRFM) reported third quarter 2025 financial results showing continued progress on its Transformation Plan, with revenue of $29.2 million and adjusted EBITDA of negative $9.9 million. The company's performance reflects improved airline operations and operational reliability supported by a strengthened systems operations center and more experienced aviation team.
The air mobility segment delivered operational and commercial gains during the quarter, with revenue increasing modestly year-over-year and sequentially. Strong growth in On Demand services more than offset planned reductions in unprofitable scheduled flying. On Demand benefited from higher utilization, a shift toward larger-cabin aircraft, and increased international activity, while Scheduled Service saw a measured pullback as management prioritized routes with attractive unit economics. Airline operations remained profitable on an adjusted EBITDA basis, supported by higher on-time departure and arrival rates and better controllable completion factors.
Subsequent to the quarter, Surf Air Mobility made significant capital structure improvements that refinanced higher-cost debt and reduced annual cash interest. These capital actions, combined with operating improvements, position the company with a more sustainable capital structure and clearer path toward scale. Stonegate Capital Partners believes the company is now better positioned to begin Phase 3 of its transformation plan, expected to commence in fiscal year 2026.
The company continues to advance SurfOS, its cloud-based operating system built on Palantir's Foundry platform. During the third quarter, Surf Air expanded internal deployment of SurfOS, rolling out aircraft and crew scheduling tools across key regions and enhancing the Crew App with capabilities that improve safety, maintenance visibility, and productivity. External beta usage broadened to a growing set of brokers and operators, supported by additional letters of intent that expand the future customer pipeline and validate product-market fit. A five-year agreement with Palantir further reinforces software as a core strategic pillar.
Surf Air Mobility remains committed to its electric powertrain program for the Cessna Grand Caravan, with management reiterating a 2027 FAA STC target for the electrified propulsion system. The company continues to evaluate partnership and joint venture structures that can share development risk while preserving upside, leveraging its scale as a leading Caravan operator and its exclusive agreement with Textron Aviation.
For the fourth quarter of 2025, the company expects revenue in the range of $25.5 million to $27.5 million and an adjusted EBITDA loss of $8.0 million to $6.5 million, reflecting the impact of exiting unprofitable scheduled routes and continued mix shift toward higher-value On Demand flying. Management continues to anticipate full-year profitability in airline operations on an adjusted EBITDA basis, supported by operational improvements.
Stonegate Capital Partners' valuation analysis indicates Surf Air Mobility currently trades at a fiscal year 2026 enterprise value to revenue multiple of 1.9x compared to comparable companies at a median of 4.1x. Using an enterprise value to revenue range of 4.0x to 5.0x with a midpoint of 4.5x, the firm arrives at a valuation range of $6.11 to $7.99 with a midpoint of $7.05.